Mike Miazga 2017-02-07 04:55:50
ALL SYSTEMS GO In an ultra-challenging marketplace, MultAlloy continues to grow its footprint as an industrial PVF master distributor. To say the industrial PVF distribution business has been challenging, worrisome, etc., the last few years would be the understatement of understatements. “It’s been a rough three years since the end of 2014,” says Jim Riding, president of Houston-based industrial PVF master distributor MultAlloy. “The market has been in decline.” But while the market has struggled, MultAlloy has been able to buck the trend by pushing forward with a proactive game plan centered on inventory, expansion (both talent and locations) and customer service. MultAlloy carries stainless-steel and specialty alloy PVF products (primarily stainlesssteel pipe, flanges and fittings) to serve small and global distributors in the petro-chemical, refining, power and general industrial end markets. “We have the resources to grow in this current market and come out on the other side of it,” Riding says. “We’ve been through several downturns and have always run the same playbook.” DUCKS IN A ROW For MultAlloy, which bills itself as one of the original master distributors with roots in the supply chain dating back to the early 1990s, that survival playbook includes making sure the company is ready to do battle both on the inventory and talent fronts. Riding notes the company carries about $50 million in inventory (and sells about 85,000 different SKUs annually) across its nine locations in the United States. “We’ve carried a lot through these downturns,” he says. “Even through this downturn we continued to buy and have inventory. That’s key for us staying afloat. We bought even though things were tough.” The company also has been proactive on the hiring front, even during these recent lean times. “We had the ability to hire talent as other companies have downsized, particularly in some of the periphery markets,” Riding explains. “Some of these other markets have seen people drop out and that’s made more people available. We’ve hired three new outside salespeople to go after new customers and be more aggressive in the marketplace. The best way to grow in down years is through talent acquisition and cash flow coming in.” MultAlloy also has expanded in terms of physical locations with the recent addition of a Billings, Mont., branch in 2016, with the plan of serving PVF customers in Montana and the Dakotas. “There’s been a lot of shakeout in that space,” Riding says. “It kind of got oversupplied and with the downturn in the market there has been consolidation in the channel. We’re hoping the Dakotas come back. This branch is one of our big initiatives.” In addition to Montana, MultAlloy also operates stocking locations in hometown Houston, Salt Lake City, Charlotte, N.C., Santa Fe Springs, Calif., Atlanta, St. Louis, Cincinnati and Howell, N.J., plus has those three new outside sales reps positioned in three other regions of the country. The company employs about 80 people. “If you plot us against everybody else in the space, we cover every market the others do and more,” Riding states. “We think we have if not the largest, then one of the largest geographic coverages in the master-distribution space in the United States. We differentiate ourselves by having full stocking capabilities in these locations. We also have focused, specialized inventory at these locations. Each branch won’t carry the same thing. We do a little hub and spoke out of Houston, but we also have a very large inventory in Salt Lake for the West Coast. We’re a little different in that regard with the breadth and depth of inventory with stainless and alloys. We’ll stock anything in the branch the customer needs.” BACKING IT UP Keeping busy on the talent and branch fronts is far from the only proactivity occurring at MultAlloy. “The keys are using our inventory and service position to expand our market share with existing customers,” Riding says. “We’re focused on new products and service introductions. We’re the only one that will do cut lengths on pipe through 24 inches. We’ve enhanced our service side with value-add machining and cutting capabilities.” In terms of valves, the company is putting a major focus on its privatelabel CF Valve line and has hired a valve industry veteran to manage the line. “We’ve moved to a different supplier for CF Valve that is more cost-effective and we’re pushing the line out deeper to our branches,” Riding explains. “We want to grow that business. Valves are very important in a lot of applications. If you have a pipe, chances are you have to put a valve on it somewhere.” Riding adds the company is laser-focused on gaining business with large distributors that either are new accounts or ones it has done business with in the past. MultAlloy recently added the likes of MRC Global and F.W. Webb to its customer base. “We want to get our name out there and gain that business with these larger distributors,” he says. In that vein, MultAlloy has started its own rebate program. “That’s helped us win back some customers,” Riding points out. Riding also touts MultAlloy’s commitment to next-level customer service. MultAlloy ships the vast majority of its orders within 24 hours and has special packaging and shipping for domestic and export accounts, as well as a 24- hour on-call emergency service. The company, which is ISO-certified, also goes to great lengths to make sure it is dealing with bona fide mills that will produce quality product and help contribute to smaller lead times. “You have to know what mills to buy from and which ones to stay away from,” says Riding, who notes the company is continually working on its online presence through its website at www.multalloy.com. “We have a quality program that focuses on making sure we deliver the right products to the customers with the right paperwork, such as MTRs. We audit around 30 mills a year and some of those are done in partnership with our customers. Our focus is the customer and having that local inventory available the same day or next-day will call. We accommodate the customers’ needs and having different brands of material on the approved import and domestic side allows us to do that.” Riding sees light at the end of the downturn tunnel and says MultAlloy is ready for action when that light starts to shine brightly again. “It looks like we’re coming to the end,” he says. “We’ve seen some big increases in stainless-steel surcharges and lead times are moving out. We feel the market is poised to make a turn. There’s a lot more competition that has come into the master-distribution space in the last 15 years. With the volatility of oil prices and the lack of financing, the lower volumes, the lower profitability and the complexities with multiple foreign suppliers, it’s difficult for a distributor to hold all the items they need in inventory at all locations. It’s not economic. “The traditional role of a master as a shock absorber of large projects and day-to-day business with the types of service levels and fill rates they want is a necessity. There is more need for master distributors in this space than there has ever been and we’re well-positioned to compete for market share.”
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